The stock market selloff is continuing to haunt investors, as high inflation and a surging interest rate environment are raising the possibility of a near-term recession. The TSX Composite benchmark has seen about 11% value erosion in 2022 so far after losing nearly 9% of its value in June alone. While these macro-level uncertainties might keep the market highly volatile in the near term, it doesn’t mean investors start selling stocks in a panic. Selling stocks due to the fears of a crash is one of the biggest mistakes beginners make. And, as I always say, it’s nearly impossible for anyone to predict a recession or a market crash.
In this article, I’ll talk about two of the TSX stocks that I’d never sell and why.
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Air Canada stock
After facing the heat of COVID shutdowns and restrictions on air travel in a previous couple of years, Air Canada (TSX:AC) stock started 2022 on a fairly positive note. AC stock rose by nearly 15% in the first quarter, but it couldn’t sustain these gains for long.
In the second quarter, the prices of energy products, including jet fuel prices, skyrocketed to their multi-year highs due mainly to rising geopolitical tensions after a full-fledged Russian invasion of Ukraine. In addition, rising inflationary pressures started hurting its bottom line. As a result, Air Canada stock tumbled by nearly 34% in the second quarter, erasing all its gains from the previous quarter. The stock now trades with nearly 15% year-to-date losses at $17.68 per share.
Despite all these negative factors, I wouldn’t dare to sell AC stock mainly because its overall long-term business growth outlook still remains positive. While the ongoing macro concerns might delay its post-pandemic financial recovery, its stock has the potential to stage a big rally in the coming months if travel demand continues to surge.
Shopify stock
Shopify (TSX:SHOP)(NYSE:SHOP) is the second TSX stock I’d never consider selling. This Canadian stock currently trades at $44.23 per share after losing nearly 74% of its value this year so far. Although it has been one of the worst-performing TSX Composite components in 2022, it has a very high potential to come out as a big winner in the coming years with the help of its solid long-term financial growth outlook.
Earlier this year, the Canadian e-commerce giant guided that its year-over-year revenue-growth rate is likely to decline in the ongoing year, as the COVID-driven surge in its demand continues to subside. However, this guidance was not surprising, as you can’t expect global pandemic-driven demand to continue benefiting Shopify even in the post-pandemic era. Moreover, these factors are unlikely to have any major negative impact on Shopify’s long-term sales growth outlook as it continues to expand its customer base and innovative services portfolio.
Given these factors, I find SHOP stock to be way too undervalued at the moment when it’s down more than 70% this year. In fact, this dip could be an opportunity for long-term investors to buy this amazing growth stock at a big bargain.
